Germany's Adidas said on Thursday it would cut the number of its Reebok 900 stores in India by about one-third as it tackles "commercial irregularities" as per CEO´s comment.
"There is definitely no further restructuring necessary as we do believe the underlying business is good, going in the right direction," Chief Executive Herbert Hainer told reporters on a conference call, stressing that the problems were limited to India.
While the Adidas group as a whole surpassed expectations for first-quarter results, its Reebok brand saw sales in the first three months down 7 percent on a currency neutral basis. The problems in India could lead to further charges of up to 70 million euros ($92 million), Hainer confirmed. The company has around 1,000 Reebok franchise stores in India.
"Although Reebok has some challenges to overcome in Western Europe this year and as retailers currently focus on the major sporting events, we nevertheless continue to see good progress in most other regions," Hainer said.
Adidas will release further information on the issue at the time of half year results in August.